3 Tips for San Diego Home Buyers (In A Seller’s Market)
The real estate market is constantly changing, sometimes within the blink of an eye. The market here in San Diego is shifting again! Currently, it’s a seller’s market, which in its simplest terms means a market in which more people want to buy than want to sell.
In the San Diego real estate market, sellers are getting multiple offers on their property listings, and even some offers way above asking price. With mortgage rates at an all time low, bidding wars are happening and buyers are getting more aggressive.
In the current market, I’ve seen buyers come to the table with cash offers 30% above asking price. Crazy huh?
A few tips on how average buyers can compete in this market:
1. Be willing to come up with extra cash, especially if the property appraises low.
Traditionally, banks will only lend the amount of money the home is appraised at. If a property is appraised low, but a higher offer is required to secure a winning bid, potential buyers will need to supplement the gap between appraised value and amount offered with cash.
2. In this market, a stronger offer may be one that isn’t contingent on the appraisal.
Some buyers write in their offers with a contingency based on appraisal meaning that their offer is only valid if the home appraises at or above the price offered.
Example: If $500,000 is the offer amount, and the home is appraised at $490,000, the buyer has the right to take back their offer because the home did not appraise at the offer amount, or they can come up with the difference by bringing more funds at closing.
Presenting an offer to the seller that doesn’t include a contingency based on appraisal is a stronger offer in a seller’s market.
3. Choose to live in an area where there is less demand, or consider a condominium.
Here in San Diego, there are beautiful areas that are hidden gems. Expand your options and trust your Realtor to listen to your wants and need and find the best home for you!